LMH v. LWP

CACV 241/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 241 OF 2010

(ON APPEAL FROM FCDJ 2497/1983)

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BETWEEN

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J U D G M E N T

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Hon Cheung JA:

Background

1.  The parties were formerly married to each other. They married in February 1968 and divorced in May 1984. For the purpose of this appeal I will refer them as wife (petitioner) and husband (respondent). By an order dated 16 January 1984 made with the consent of the parties, the husband was ordered to pay periodical payment of $4,000 per month for the maintenance of the wife and $4,000 per month for the maintenance of the three children of the family. The children are now adults.

2.  By a summons dated 4 February 2009 the wife asked for an upward variation of her periodical payment to $25,000 per month and also for payment of arrears of the periodical payment. The parties reached terms on the claim for arrears with the husband agreeing to pay $140,000 to the wife and this claim was not pursued by the wife. However, she continued with her application for variation and H H Judge Melloy on 26 May 2010 varied the periodical payment to $15,000 per month. Pursuant to leave the husband now appeals against the judgment. The husband has not paid any of the increased amount of maintenance (he has continued to pay the original $4,000 per month) without obtaining a stay of execution of the order. This resulted in garnishee proceedings being instituted against the husband.

The wife’s position

3.  The wife has been living in England since 1994.  She has limited income, working part time as a sales assistant in a sandwich shop earning £381 per month.  She also took up low pay casual works occasionally.  Her monthly expenditure was about $20,000.  She lives in a rental accommodation owned by her friend.  Very often she was unable to pay for the rent.  She said that her friend had previously agreed not to require her to pay back the arrears but has insisted that she must pay the rent as it falls due.  She does not have any other property.  She is now over 60 years of age and wishes to return to live in Hong Kong in the near future.  She has not applied for public assistance in England due to her pride and the fact that she has been receiving maintenance from the husband which may prevent her from applying for assistance.

The husband’s position

4.  The husband remarried in 1986. He has three children from the second marriage who are now aged 18, 16 and 15. Two of the children are now at university and boarding school respectively in England (at the time of the hearing below, only the middle child was in England). The husband is a certified public accountant. He first worked in one of the leading accounting firms in England and Hong Kong. Later he joined a local accountant firm. At the age of 55, he became an equity partner of another firm. Although described as an equity partner the arrangement was that he did not have any equity interest in the firm. He was paid $100,000 per month which was later reduced to $50,000 per month shortly before he retired at the age of 65 at the end of 2009. He is now 68 years of age.

5.  According to the Form E filed by the husband he has assets of $7,398,505.59. The bulk of which is in the form of two landed properties valued at about $5,700,000. He holds shares in private companies valued at about $600,000, holdings in stocks valued at about $360,000 and money in bank at about $425,000.

6.  His second wife owns the matrimonial home where they are now living.

7.  His monthly income was $99,000 which was revised at the hearing below to the current level of $55,000.

Particulars

8.  His expenditure per month was $125,000 which included expenditure for himself, the household and the education expenses of the three children of the second marriage.

9.  The school fees and expenses for the children are about $80,000 which may be increased if the young daughter who is currently studying in Hong Kong goes abroad to study in the near future.

10.  The husband was prepared to share his UK state pension with the wife.

Appeal on discretion

11.  As this is an appeal against an exercise of discretion by the judge, this court is not exercising the discretion afresh but is looking to see whether the discretion has been wrongly exercised contrary to established principles such as the judge taking into account irrelevant considerations or ignoring relevant matters.

The judge’s view

12.  The judge was not satisfied that the wife had substantiated completely her claim for an increased periodical payment of $25,000 per month.  The evidence produced by her in the form of bank statements did not support her claim for monthly expenditure of $20,000 per month.  The judge clearly accepted that $4,000 per month is not enough to meet the wife’s need.  As it was, the award of $4,000 was based on one quarter of the husband’s then salary of $16,000 per month.  His income now is $55,000 per month.

13.  At the same time the judge was of the view that the husband had not fully disclosed his financial resources.  Given his current income, the judge held that the husband clearly has to rely on financial assistance from elsewhere in order to meet his expenditure.  He has provided very limited information about his current wife’s financial position. He had referred to his wife in his affidavit as a financially independent businesswoman, although at the hearing below he informed the judge that she was not working ‘for the moment’. 

My view

14.  In my view the judge has not erred in her decision when she increased the periodical payment to $15,000 per month. 

15.  The husband questioned why the wife suddenly decided to lodge a claim against him when he is now retired and after he had faithfully observed the 1984 order and paid the wife maintenance for more than 25 years.  He also claimed that he had provided for the three daughters over and above what he was ordered to pay them. 

16.  As the parties have never achieved a clean break in their financial arrangements, the wife is entitled to apply for a variation of the periodical payment order.  There is also a legitimate basis for the wife to bring the present application in 2009 after a lapse of 25 years because she is also reaching retirement age and she obviously also is concerned with her loss of income in reaching old age.

17.  The husband contended that the judge had wrongly taken into account his income from the two non-executive directorships because the two posts are not permanent in nature and he may not be able to continue with them because of his age. 

18.  The judge is aware of this but clearly she is entitled to take into account the income arising from the two posts.  As apparent from the judgment what caused the judge to revise the payment upwards is the incomplete disclosure by the husband of his finances.  The husband’s income of $55,000 and his expenditure in relation to school fees of his three children of about $80,000 per month confirmed the judge’s observation.  She also took into account his earning capacity.  Although he is retired from his professional practice, his experience and professional qualification would enable him to earn even in his retirement. 

19.  The husband contended that the wife had not made full disclosure of her financial position, for example, she did not disclose why she does not receive state pension.  The judge was aware that the wife had not come up to proof.  The judge only increased the periodical payment to $15,000 because the wife failed to substantiate her claim for $25,000.  The judge held that the wife would make better use of the revised amount in England rather than coming back to Hong Kong. 

20.  The husband contended that he has started a new life with his current family and he has an obligation to provide for the three young children like he did with the three older daughters of the first marriage.

21.  The three older daughters are living in England.  They all received university education with the support of the husband and are professionals in their own field.  They are financially independent and although not married, they are living with their partners.  Unfortunately the eldest daughter has been stricken with cancer and the husband has agreed to provide her with £1,000 per month to enable her to buy health food supplements.  The husband paid £1,000 in December 2011.  He submitted that as he is the head of the current family, the responsibility lies with him and the increased payment operates to his prejudice in respect of his obligation towards the three young children.  He said that he should not ask his present wife to be responsible for their education. 

22.  The husband is plainly a dutiful father and his assistance to the daughter who is ill to his credit.  However, the court is concerned with whether the judge’s decision was correct based on the material before her.  The judge clearly recognized that the husband has an obligation towards his new family but held that he also has an obligation towards his former wife although the marriage was dissolved 27 years ago.  In ordering $15,000 to be paid to the wife, the judge was not putting the wife’s interest ahead of the husband’s present family.  The husband’s current wife is the mother of the three young children.  She is financially independent and there is no reason why her resources should not be used towards them.  This would allow the husband to discharge his increased obligation towards the wife.

Costs below

23.  The judge ordered the husband to pay the wife 50% of her party and party costs of the application to vary.  As the wife had succeeded in her application to vary, she was entitled to the costs.  The 50% apportionment reflects her inability to obtain the whole $25,000 she had asked for in the first place.  The decision on costs was correct.

Conclusion

24.  Accordingly the appeal is dismissed.

Costs

25.  As the husband fails in his appeal, he should bear the wife’s costs of the appeal. The wife’s own costs are to be taxed according to Legal Aid Regulations.

Hon Fok JA:

26.  I agree with the judgment of Cheung JA.

Hon Lam J:

27.  I agree and have nothing to add.